Canfax report

This cattle market information is selected from the weekly report from Canfax, a division of the Canadian Cattlemen’s Association. More market information, analysis and statistics are available by becoming a Canfax subscriber by calling 403-275-5110 or at www.canfax.ca.

Fed cattle prices up

Prices for fed steers and heifers took a jump last week. Fed steer prices rose $2.59 to reach $157.57 per hundredweight. Heifers rose by $2.22 to reach $156.31 per cwt.

Alberta direct cattle sales saw light to moderate volume trade last week, and average prices firmed. Cattle futures were somewhat volatile, but last week’s North American market tone strengthened as winter-like weather continued to moderate feeding performance and market ready spring supplies.

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Most sales last week were dressed from $265 delivered and were around $4 higher than average rail trade last week.

Canadian steer carcass weights have slipped 22 pounds smaller since the end of March and for the week ending April 14 averaged 885 lb. Compared to the same week last year, steer carcass weights are 20 lb. heavier.

Western Canadian fed slaughter for the week ending April 14 was eight percent larger than the previous week at 36,871 head. Year to date western fed slaughter was eight percent larger, totalling 472,883 head.

Canadian fed cattle exports to the United States for the week ending April 7 were two percent smaller than the previous week at 5,954 head and year to date were down 19 percent, totalling 71,205 head.

Spring beef demand has improved, and profitable packer margins should continue to encourage an ample harvest. Carcass weights are expected to moderate as more calves hit the market.

Increased feeding costs are encouraging feedlots to market lighter cattle, and market-ready supplies will continue to be pulled forward.

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In the U.S., sale volumes were limited in the north. Most sales in the south were reported from US$121-$122 and were $4-$5 higher than the previous week. Scattered live trade in the north was reported late last Friday, $2-$3 higher than the previous week at $122-$124. Dressed bids firmed to $195 delivered and would be around $5 higher than the previous week’s rail average.

Cow slaughter volume up

Prices for D1 and D2 cows, as well as slaughter bulls, were down last week. Cows traded at C$93.33, down $1.79, and bulls traded at $108.58, down $1.07 from the previous week.

Cow prices were $2.25 shy of their January highs. Western Canadian cow slaughter volumes totalled just over 7,100 head, the eighth consecutive week that slaughter volumes have been above year ago levels. On a weekly basis, the last time more than 7,000 head of cows were slaughtered in April was 2009.

The cow price spread between Canada and the U.S. has widened in recent weeks. Alberta D1, D2 cows prices are sitting at a $16 premium to the U.S. utility market. With many producers across the Prairies dealing with and managing tight feed supplies, calving culls are being marketed in a timely manner. Year to date cow exports are down 35 percent, and bull exports are down 39 percent compared to last year.

Feeder basis stronger

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So far this year, 850 pound feeder basis levels have been trending similar to 2017. Since the beginning of April, feeder basis levels have strengthened, going from -13.81 to -4.76 last week.

There were some special open replacement heifer sales, and demand was strong with a large percentage of breeding quality heifers priced from $1,400-$1,600 per head.

Looking beyond these few sales, demand for replacement heifers has been moderate. Over the past month, some breeding quality heifers that were hand selected, palpated and sorted into smaller groups ended up being placed into feedlots.

In Alberta and Saskatchewan, 550 lb. steers are trading at a $32-$33 premium compared to same weight heifers, whereas last year the spread was $30.50. With barley prices ticking higher, the price spread between steers and heifers is not expected to narrow.

The U.S. holds a cost of gain advantage over Western Canada, and interest from U.S. buyers has been noted on the western Canadian heifer market. Year to date feeder cattle exports to the U.S. are 35 percent larger than last year but 13 percent smaller than 2016.

Numbers have not been huge, but some cattle that would traditionally be sold as grass yearlings in the fall are coming to market now. Most producers are only selling a small percentage of their intended grass cattle to help manage tight feed supplies.

Cow-calf pairs traded in a range of $1,750 to $3,100 last week.

Grilling demand expected

In beef trade, prices for U.S. Choice and Select cutouts were down slightly from last week. Choice traded at $211.34 per cwt., down from $212.48, and Select traded at $198.48, down from $200.67 the previous week.

Light to moderate boxed beef demand continued last week, and the offering was again moderate to heavy.

For a second week in a row, beef at retail was the top featured protein. Improved grilling demand is anticipated and should enhance support along the entire beef chain.